Why clever people make stupid decisions ?

Making the right decision is difficult, not least because our brains have many  inbuilt biases that lead us to behave in ways that defy logic and good sense. In  this extract from the New Scientist book, The Brain: A user's guide, we look at  why that is and some of the most common cognitive biases to avoid.

Stupid


HOW intelligent are you? When it comes to making good  decisions, it doesn’t matter, because even the brightest  people can do ridiculous things. Clever people act foolishly  because intelligence is not the same thing as our capacity for  rational thinking – and that’s what matters when it comes to  making good decisions.  IQ tests, designed to measure general intelligence, are  very good at measuring certain cognitive abilities, such as  logic and abstract reasoning. But they fail when it comes to  measuring those abilities crucial to making good  judgements in real life. That’s because they don’t test things  such as the ability to weigh up information, or whether a person can override the intuitive cognitive biases that lead  us astray. Understanding the factors that lead intelligent  people to make bad decisions is shedding light on society’s  biggest catastrophes. More intriguingly, it may suggest ways  to evade the stupidity that plagues us all.

Gut reaction

Consider this puzzle: if it takes five machines 5 minutes to make five widgets, how many minutes would it take a  hundred machines to make a hundred widgets? Most people  instinctively jump to the wrong answer that "feels" right –   a hundred – even if they later amend it to the correct one,  which is five.  When researchers put this and two similarly counterintuitive questions to thousands of students at colleges and universities – Harvard and Princeton among them – only   17 per cent got all three right. A third of the students failed to  give any correct answers.

Here’s another one: Jack is looking at Anne but Anne is  looking at George. Jack is married but George is not. Is a  married person looking at an unmarried person? Possible  answers are "yes", "no", or "cannot be determined". Most  people will say it cannot be determined, simply because it is  the first answer that comes to mind – but careful deduction  shows the answer is "yes" (we don’t know Anne’s marital  status, but either way a married person would be looking   at an unmarried one). 

We encounter problems like these in various guises every day. And regardless of our intelligence, we often get them wrong. Why? Probably because our brains use two different systems to process information. One is deliberative and  reasoned, the other is intuitive and spontaneous. Our  default mechanism is to use our intuition. This often serves  us well – choosing a potential partner, for example, or in  situations where you’ve had a lot of experience. But it can  also trip us up, such as when our gut reactions are swayed by  cognitive biases such as stereotyping or our tendency to rely  too heavily on information that confirms our own.


How to be less stupid.


■ Clear your mind.  Judgements are often   based on information   you recently had in mind, even if it’s irrelevant. For example, people bid  higher at auctions when  they are primed to ponder  the height of the tallest person in the room.


■ Don’t fall foul of spin. We have an inclination to be influenced by the way a problem is framed. For  instance, people are more likely to spend a monetary award immediately if they are told it is a bonus, compared with a rebate.


■ Don’t let emotions get in the way. Emotions interfere with our  assessment of risk. One example is our natural reluctance to cut our losses on a falling investment  because it might start rising again.

■ Use facts. Don’t allow your opinion to cloud your analysis.


■ Look beyond the obvious.

■ Don’t accept the first thing that pops into your head.

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